‘A lot of problems would start at the top’: How Payless bungled its post-bankruptcy comeback

Digiday 12 Feb 2019 05:02

Nearly two years after emerging from a bankruptcy filing, Payless ShoeSource is reportedly preparing to file for bankruptcy protection again.

Payless joins a group of struggling retailers like Pier 1 imports, Gymboree and Shopko that struggled to carve a place for themselves as customer spending shifted online and mall traffic declined. Payless has faced fast-fashion competition, the lack of a compelling online presence and private-label pressure from large retailers like Walmart and Target, which have made it difficult to attract and keep customers.

More urgently, staff turnover at all levels, coupled with the lack of a long-term strategy, has caused Payless to break down again in the two years after it filed for bankruptcy the first time. According to one former employee who worked on Payless’ digital marketing team in 2018, the retailer failed to tackle core challenges around customer retention, brand strategy and in-store experience in the critical time frame following its bankruptcy exit.